West Coast - properties snapped up in minutes and buyers with fistfuls of cash

Is West Coast the worst place to buy and sell a house in New Zealand? It’s certainly the cheapest. Over the last two years, when the housing market was at its hottest, the region’s average property grew $112,000 to $397,000 – a quarter of what Aucklanders can expect to pay for property.

But house price inflation in the two regions over the boom has been tracking at the roughly the same level – 39%, according to the latest figures from the OneRoof-Valocity House Value Index.

West Coast's median sale price for February - which reflects the price of all the properties sold in the region during the month - was $346,000, up from $345,000 in January and $355,000 in December.

But as is the case in Auckland, the market in West Coast is facing some strong headwinds.

New figures released by the Real Estate Institute of New Zealand showed the number of sales in West Coast have taken a plunge. Sales volumes for February were 55.6% down on February 2021, from 90 to 40, and were the lowest sales count for a February since 2017.

Properties on average are taking 41 days to sell, twice as fast as the region’s 10-year average (and up 11 days on last year’s booming pace), and the region has only 19 weeks’ stock of listings - 10 weeks less than the same time last year.

Unlike the rest of the country, the Coast did not see the influx of new listings last month but were down 2.7% and the total number of properties for sale down 7.6%.

That’s a big change from 2021.

Charlie Elley, area manager for Property Brokers, told One Roof that the region last year was going “absolutely gangbusters”.

"Especially around Buller region and Westport, people were flocking here. They could see the capital difference, coming from Canterbury, Otago, or from the North Island, a large proportion from Auckland.

“They were boomers having a huge amount of cash leftover from selling over the last few years.”

A four-bedroom home on Lakeside Terrace, Westport, sold in December for $925,000. Photo / Supplied

Elley said prices shot up last year. He estimated top end lifestyle residences fetching $1.2m would have gone for $900,000 a year ago, while homes closer into towns were selling for $700,000 to $900,000 up from $550,000 to $750,000.

OneRoof records show 15 residential and lifestyle properties have sold for over $1m on the West Coast – eight of those in the last year. Most were on large lifestyle plots ranging from 3500sqm to 40 ha.

The record price of $1.45m, achieved in December, was for a modern four-bedroom house on the hills of Rutherglen above Greymouth with stunning sea views.

That’s helped drive the region’s median price to $346,000, up 17% on last February, but down from its November record high of $350,000.

A 5-bedroom home on Hau Hau Road, in Hokitika, sold at auction in January for $1m. Photo / supplied

James Wilson, head of valuations at OneRoof’s data partner, Valocity, said that fluctuating numbers have to be treated with caution in smaller markets,

“The West Coast is still the ‘best bang for your buck’ market. The housing market there is driven by people’s need, and that’s a powerful factor,” Wilson said.

“On paper, it should be a basket case but other things are driving activity.

“Economically there have been some bad news stories, but it is still propped up by people who are moving from another urban area. If they sell for $1.5m and buy on the Coast for under $1m, that’s $500,000 they can bank.”

Agents pointed to recent sales as evidence of West Coast’s ability to draw buyers.

Valocity head of valuation James Wilson says West Coast offers buyers real value. Photo / Supplied

In December, Property Brokers agents sold a four-bedroom house on Lakeside Terrace, Westport, for $925,000 – more than $400,00 above what it sold for five years ago. A smart five-bedroom 272sqm house on Hau Hau Road, above Hokitika, sold for $1m - $120,000 more than its sale price 13 months earlier. And a property on Brougham Street, in Westport, sold for $850,000 - $250,000 above agent expectations.

Elley maintained the stall this year was due not to a drop in demand, but a drop in listings, so this year’s sales volume is more like “normal years”.

“Last year, people were wanting to shift here with fistfuls of money, and were buying what they wanted because the supply was there.”

Elley also blamed the slowdown of buyers on the “reputational damage” to the district from the council’s communication of plans for protection after the havoc of last year’s and the early February floods.

“There’s a lot of scaremongering about the worst possible scenarios. That’s not how we live, so we’re getting some realism into the plans and that will give people confidence.”

A modern house on Brougham Street, in Buller, sold for $850,000. Photo / Supplied

REINZ chief executive Jen Baird agreed.

“The flooding in Westport caused market activity to stall and a feeling of concern to linger amongst residents,” she said.

“Once the council implements substantial flood protection, with construction beginning to take place promptly, agents expect sales activity and stock levels to improve coinciding with the bearings of market sentiment.”

Harcourts Greymouth business owner Kevin O’Donnell agreed the lack of stock for the “plethora of buyers” from all over the country was all that was holding back sales.

He said when new listings appear they are snapped up: just this week Harcourts agents had four offers within an hour of going on the market with a section in Blackball asking $89,000, while another on the town’s south town belt sold within 20 minutes when it was listed in February.

“Five years ago, we’d have cringed if we had the call to sell in Blackball,” he said.